The price of alcohol and tobacco soar: “a pack of cigarettes from a hundred hryvnia”

The price increase is associated with an increase in excise taxes on tobacco products.

The forecast contained in inflation report National Bank of Ukraine for April.

In 2019 the growth of prices on tobacco products is expected to reach 19%. The rise in price of alcohol is projected to be 6-9% per year in 2019-2021.

In March 2019, the growth rate of prices of alcoholic beverages remained virtually unchanged (9,9% y/y).

Despite the increase in excise duties, growth of prices of tobacco products slowed down to 24.0% y/y. This can be explained by the fact that indexing specific excise tax rates on tobacco products (20%) was less than the growth rate of prices for these commodities.

In Ukraine a pack of cigarettes will rise to more than 100 UAH. Cheap tobacco products can introduce an additional tax.

We note that recently the economist Oleksandr Okhrimenko said that by the end of 2019 the inflation rate in Ukraine will be 16%.

“To reduce the inflation rate there are no prerequisites. By the end of the year it will begin to grow. In particular, closer to the parliamentary elections will begin again the increase of pensions, social payments and additional payments to state employees. By the end of 2019 the inflation rate will be 15-16%,” — said the economist.

The level of inflation in the country will depend on the dollar exchange rate, world prices and election results. Inflation can predict when stability in the country. NBU forecasts inflation at 6.3% is not realistic, after all, this year will be another increase in utility tariffs.

“It’s hard to say where the national Bank took such predictions at the expense of prices, wages, tariffs and inflation. NBU on rate increases does not affect. Absenc made this forecast for statements. No serious expert will not undertake to predict, what is the average salary to the end of the year. Ukraine depends on the level of world prices for the goods that it consumes. Therefore, the national Bank makes too bold of a statement that is not relevant to the actual projected”, — said the expert on economic issues Vsevolod Stepanyuk.

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